Pranav Gupta And FPBAI

Case No. 38 of 2021 Page 1 of 45 COMPETITION COMMISSION OF INDIA Case No. 38 of 2021 In re: Pranav Gupta B-10, Greater Kailash Part I, New Delhi – 110 048. Informant And Federation of Publishers’ and Booksellers’ Association in India 84, Second Floor, Daryaganj, New Delhi – 110 002. Opposite Party CORAM Ravneet Kaur Chairperson Anil Agrawal Member Sweta Kakkad Member Deepak Anurag Member Present: For the Informant Shri Pranav Gupta : Shri Rahul Goel, Advocate Ms. Anu Monga, Advocate Shri Vikas Ashwani, Advocate Ms. Aditi Sharma, Advocate Shri Pranav Gupta, Informant in-person For the Opposite Party Federation of Publishers’ and Booksellers’ Association in India and its former President, Shri Pradeep Arora : Shri Karan Chandhiok, Advocate Ms. Deeksha Manchanda, Advocate Ms. Aileen Aditi Sundardas, Advocate Shri Jai Hindocha, Advocate Shri Pradeep Arora, former President, FPBAI in-person For Shri S.C. Sethi, former President, and Shri Prashant Jain, former Honorary Secretary, of Federation of Publishers’ and Booksellers’ Association in India : Shri Vaibhav Arora, Advocate Case No. 38 of 2021 Page 2 of 45 ORDER UNDER SECTION 27 OF THE COMPETITION ACT, 2002 Facts: 1. Information in the present matter was filed by Shri Pranav Gupta (‘Informant’) under Section 19(1)(a) of the Competition Act, 2002 (the ‘Act’) against 25 Opposite Parties (‘OPs’) alleging, inter alia, contravention of the provisions of Section 3(3)(a) and 3(3)(b) read with Section 3(1) of the Act. These 25 OPs included the Federation of Publishers’ and Booksellers’ Associations in India (‘FPBAI’) which is an umbrella body/ association of publishers and booksellers in India, 07 publication houses who are active participant members of FPBAI, 10 individuals who are past members/ office- bearers of FPBAI, and 07 regional associations of publishers and booksellers in India who have membership in FPBAI. 2. The Informant is stated to be the Managing Director of Prints Publication Pvt. Ltd. (formerly, Prints India) which is a member of FPBAI, and a Director of Swets Information Services Private Limited and Omlogic Consulting Private Limited, as well as Co-Founder of PragatiE. 3. The Informant alleged that FPBAI provides its platform to cartelise and dictate/ facilitate fixing of prices and also limits and controls the supply of books and journals within the territory of India. The Informant levelled threefold allegations – (i) fixing of currency exchange rates by FPBAI for import/ export of books/ journals, which rates are higher than the Reserve Bank of India’s (‘RBIs’) published rates; (ii) capping of discounts which may be offered by members of FPBAI to Indian libraries/ institutions etc.; and (iii) limiting and controlling supply of books and journals in India by fixing terms of supply, regulating credit period, fixing re-sale prices and issuing advisories to libraries and other institutions to not engage in business with vendors/ distributors who are not empanelled with FPBAI. The Informant submitted that the duration of such cartel is from at least 2013 till June 2021. 4. Based on such allegations, the Commission, vide order dated 23.12.2021 passed under Section 26(1) of the Act, formed an opinion that a prima facie case of (i) fixing of inflated currency exchange rates in relation to supply of books, journals and periodicals in India, in contravention of the provisions of Section 3(3)(a) read with Section 3(1) of the Act; (ii) fixing discounts in contravention of the provisions of Section 3(3)(a) read Case No. 38 of 2021 Page 3 of 45 with Section 3(1) of the Act; and (iii) issuing terms and conditions with respect to credit period, interest rates and verification of prices, and issuing advisories/ appeals to libraries, booksellers and/ or Institutions for not dealing with non-members of FPBAI, in contravention of the provisions of Section 3(3)(b) read with Section 3(1) of the Act, is made out against FPBAI in the present matter. However, the remaining OPs were removed from the array of parties. The Commission accordingly, referred the matter to the Director General (‘DG’) for causing an investigating and directed the DG to submit an investigation report. 5. The investigation report was submitted by the DG on 29.11.2022 along with case record. In the investigation report, the DG, inter alia, concluded as under: 5.1 Good Offices Committee (‘GOC’), a committee of FPBAI, under its mandate, determined exchange conversion rates for ten foreign currencies. Such rates were 3-5% higher from the bank rates, disseminated every month on a regular basis, benefitted only a few booksellers who are importers, but resulted into losses to majority of booksellers. The same were mandatorily followed by the booksellers across India and such conduct amounts to price fixation in terms of Section 3(3)(a) read with Section 3(1) of the Act. 5.2 With regard to fixing of discounts, the conduct of FPBAI of not withdrawing its earlier circulars containing discount clause from public domain and not issuing advisory to sensitise its members in this regard, pursuant to Commission’s order dated 23.02.2021 passed in M/s International Subscription Agency v. FPBAI, Case No. 33 of 2019, is in contravention of provisions of Section 3(3)(a) read with Section 3(1) of the Act. 5.3 The act of FPBAI of prescribing terms and conditions in GOC circulars which are not only circulated to all bookseller members and member state associations but also followed by the book industry in general, has the effect of controlling the market for book trade in India, in contravention of provisions of Section 3(3)(b) read with Section 3(1) of the Act. 5.4 The act of FPBAI of neither withdrawing the appeals and advisories previously issued to libraries and institutions for dealing with members only nor issuing any communication that such appeals/ advisories ceased to be in force which Case No. 38 of 2021 Page 4 of 45 led to a large number of libraries still insisting on the condition of a book supplier being a member of any state association or FPBAI, coupled with regular circulation of approved vendor list, was is in contravention of provisions of Section 3(3)(b) read with Section 3(1) of the Act. 5.5 For such conduct of FBPAI, Shri Pradeep Arora, President of FPBAI in 2020- 21 and 2021-22, Shri S.C. Sethi, President of FPBAI in 2019-20 and Chairman of GOC in 2020-21 and 2021-22, and Shri Prashant Jain, Honorary Secretary of FPBAI in 2020-21 and 2021-22, are found to be liable under Section 48 of the Act. 6. The aforesaid investigation report submitted by the DG was forwarded by the Commission to the Informant and the OP, as well as its three individuals found liable by the DG under Section 48 of the Act (‘parties’), vide order dated 16.06.2023, with an opportunity to file suggestions/ objections, if any, to the same. Further, FPBAI and its individuals were directed to file their financial statements (Balance Sheet and Profit and Loss account) and Income Tax Returns (‘ITRs’) respectively, for the Financial Years (‘FYs’) 2019-20, 2020-21 and 2021-22. Thereafter, the parties through their respective counsel(s) were heard on 27.11.2024 and 15.01.2025 and the Commission decided to pass an appropriate order in the matter in due course. The parties were also allowed to file post-hearing short written submissions within a period of one week. During the course of hearing, the learned counsel for FPBAI had adduced certain additional evidence before the Commission. The Informant was given liberty to include its arguments on such additional evidence as well in its short-written submissions. Submissions of Parties: 7. Through written objections/ suggestions to the investigation report, oral averments, and post hearing submissions, FPBAI and its three individuals submitted, inter alia, as under: 7.1 Preliminary objections: (a) selective reliance placed by the DG on statements of FPBAI members and office bearers which supports its conclusions; (b) the DG foreclosed the opportunity of FPBAI for cross-examination of witnesses deposed, despite heavily relying on submissions made by third-parties; and (c) the DG failed to include in the investigation report all documents collected and statements